Bank of England continues to hold interest rates at record low
Bank of England decides to keep interest rates at their record of 0.5 per cent for a 15th month
Thursday, 10, Jun 2010 12:38
By Sarah Garrod
The Bank of England has decided to keep interest rates at their record low of 0.5 per cent for a 15th month.
The Bank also decided not to put any more money into the economy in the form of quantitative easing (QE).
In a statement the Bank said: "The Bank of England's Monetary Policy Committee today voted to maintain the official bank rate paid on commercial bank reserves at 0.5 per cent.
"The committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion."
Barry Naisbitt, chief economist at Santander UK, said following the Bank's announcement: "As expected, there was no change from the Monetary Policy Committee (MPC) on rates today.
"The MPC has been using its quantitative easing policy together with the historically low level of rates and is watching the new economic data very carefully to see whether it is meeting its expectation of the likely development of inflation and output.
"Recent indicators, such as survey indicators of output, show a reasonably positive picture of economic activity, and GDP growth in the first quarter has been revised up from 0.2 per cent initially to a slightly healthier 0.3 per cent.
"Of course, inflation at 3.7 per cent is well above its target, but this is largely due to temporary factors and the Bank of England expects it to move back towards the two per cent target as the year progresses. So this will have been one important factor in today's decision."